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Do you remember how old you were when you had your first bank account? I opened my first account alongside my mom (who was listed as the joint owner) at a nearby credit union when I was in the third grade. For years, that account served as a savings vehicle where I put money from holidays, eighth-grade graduation and — at 15 years old — my first job.
That’s actually not too outside the norm: In 2020, 49% — nearly half — of American children had a savings account, according to Statista.
And money management should start early for kids. Parents should make trips to the bank with them — and make them a big deal — beginning around age 6. You can help them open a savings account, and use that experience to introduce different money concepts, like how they’ll earn interest by leaving their money in the bank.
Good news: Many big-name banks offer accounts for minors, and lots of them are low- or no-fee. Here’s what you need to know about the best savings accounts for kids and other bank products.
Why You Should Open a Bank Account for a Minor
It may be tempting to hold on to your children’s money for them in your own savings account or let them keep it in a piggy bank. But it’s a good idea to open a bank account for them for several reasons.
Opening a bank account can:
- Help kids learn the value of money, from saving to spending it.
- Help they understand compound interest and how it makes their money grow.
- Help them learn to delay instant gratification by saving toward a goal.
Opening an account is also a great way to teach, or reinforce, good budgeting habits. Your child can start learning about saving for college, put money in a high-yield savings account or create a sinking fund (typically, money outside of a traditional savings account or emergency fund) for a summer vacation. By starting early, they’ ll have a better understanding of how money can be a tool to help them achieve their goals and learn about financial…
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